There is always a risk when it comes to investing, and even the savviest of investors can keep themselves up at night thinking about the potential loss. However, what if some of those high risk investments you’ve heard about aren’t really that wild? In reality, some investment opportunities might appear risky, but can be very profitable. It’s a bit like a treasure hunt; there’s usually a reward for those who take the time to dig a little deeper.
If you’re willing to look past the traditional paths to wealth building, and explore other ways to grow your wealth, you might be surprised by what you find. Below are 16 investment opportunities that may seem risky at first, but could be the ticket to millionaire status if you approach them with strategy and a little courage.
Cryptocurrency
Since Bitcoin’s debut, cryptocurrency is famously volatile, but it has also created more than a few millionaires. Ethereum, Solana, and Cardano have also proven to be crypto with the potential for big gains. Despite wild swings in values, many are convinced of crypto’s long term promise as digital assets continue to attract mainstream attention and investment.
Peer-to-Peer Lending
A slightly different version is the peer to peer (P2P) lending in which people invest money in loans that entrepreneurs or small businesses are looking to get. With sites like LendingClub and Prosper, you can even lend directly to borrowers. There’s a risk of default, but diversifying your P2P investments can help mitigate this risk while the high interest returns can add up very quickly.
Investing in Startups
Investing in startups is risky—many young companies fail—but the ones that don’t can return enormous amounts. With platforms like AngelList and SeedInvest, it’s never been easier to invest small amounts in early stage startups. The path has become popular with those willing to take a leap of faith because there is the potential for significant payouts when a startup succeeds.
Real Estate Crowdfunding
Real estate crowdfunding allows you to invest in commercial or residential properties without needing to put millions of dollars upfront. For example, Fundrise and RealtyMogul are platforms that let you pool funds with other investors to fund large real estate projects. However, real estate is not as liquid as stocks, but often appraises in value over time, and on some cases, there is revenue generation too from rental payments.
Foreign Real Estate
In a world of emerging markets, the potential of return on investment on property overseas is large, but seemingly daunting. Real estate booms are happening in places like Portugal, Mexico, and Costa Rica. These countries allow you to rent out properties for income and sell them later for a profit. Additionally, some places will provide residency visas to foreign investors.
Collectibles
People, seeking ways to grow wealth other than stocks and bonds, are investing (more) in art, rare coins, wine, even classic cars. Some collectibles can even grow in value over time if they’re unique or very unique or historically important. It takes knowledge and patience to see a return, so this one’s for those who have a passion for the items they’re investing in.
Renewable Energy
With the world moving toward sustainability, there is growth to be had by investing in renewable energy projects, such as solar and wind farms. The government may also offer incentives to these investments which can only serve to help, and some companies and funds only work with renewable energy projects. The global push for clean energy could make this a high growth area, though it’s a developing sector.
Water Rights
With water scarcity becoming an issue, water rights are becoming an asset. Already, owning water rights amounts to some forms of rights to bodies of water that can be bought and leased to others. Although this is a relatively new area, the need for water means the demand is likely to grow over time and may provide strong returns.
Cannabis Industry
As more states open up legal recreational and medicinal use of cannabis, the industry has had an explosive growth in recent years. High returns are possible from cannabis stocks and private holdings of dispensaries or grow operations but the industry is volatile and heavily regulated. This field requires you to stay informed on legislation changes.
Online Businesses
You can buy or start an online business (a blog, e commerce store, or subscription service) for relatively low cost and the potential for recurring income. There are platforms such as Flippa, where people can choose to buy an established online business. If you have the right niche and the right strategy, these businesses can pay steady profits over time, but they need regular maintenance.
Franchising
Franchising is a gamble, but it’s a proven business model with a pretty good success rate in many cases. Subway, Dunkin’, and Chick-fil-A are just a few of the brands that offer the chance to buy into a franchise opportunity, as a proven business with brand recognition. Initial costs are high, but the structure and support to keep it going makes it worth it.
Special Purpose Acquisition Companies (SPACs)
SPACs are basically shell companies that go public with the goal of merging with a private company and taking it public. That’s because they provide private companies a quicker way to go public. SPACs are risky, but when they work, they can be very lucrative to early investors.
Venture Debt
Venture debt is a loan to these companies rather than the investment in startup equity done by venture capital. Returns may be smaller, but they’re faster because the risk is lower than pure equity investment. Startups are more likely to repay debt, and interest rates tend to be high. This could be a safer entry to high growth startups.
Intellectual Property
Intellectual property (IP) investments are basically a right to an invention, music, patents, or any kind of create. Buying music royalties can be as easy as hitting a button for those interested in passive income, thanks to platforms like Royalty Exchange. Finding the right IP with staying power is the trick, but this method can be highly profitable, especially for popular works.
Impact Investing
Impact investing refers to putting money into companies or projects which seek to bring about positive social or environmental change. Impact investments can solve world issues while also bringing financial returns from education to healthcare. While the profit margins are likely to be narrower than with traditional investments, they are attractive to investors who want to see meaningful growth.
Emerging Market Bonds
If you invest in bonds from these emerging markets, whether in Latin America or Asia, you can occasionally receive a higher yield than U.S. bonds. The risk of investing is high, and with currency volatility and political instability, but emerging markets tend to grow at a faster rate, making these bonds worth the extra risk for those willing to take it.
Disclaimer: This list is solely the author’s opinion based on research and publicly available information.
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